TCS Announces Pay Hikes For 80% Employees Even As Layoffs Loom For 12,000 Staffers

The wage hike decision stands in contrast to the company’s ongoing layoff strategy, which TCS has linked to its larger goal of becoming a “future-ready organisation"

TCS, along with other leading Indian IT firms, reported single-digit revenue growth for Q1 FY26

Source : Ambition Boz

India’s largest IT services provider, Tata Consultancy Services (TCS), is set to implement salary hikes for nearly 80 per cent of its employees, specifically those at mid and junior levels. This comes at a time when the company is preparing to lay off approximately 12,000 employees during the current fiscal year — a move tied to broader structural changes aimed at future-proofing its operations.

In an internal communication shared with employees on Wednesday, Chief Human Resources Officer Milind Lakkad and CHRO Designate K Sudeep confirmed that the pay revisions will take effect from September 1, 2025.

“We are pleased to announce a compensation revision for all eligible associates in grades up to C3A and equivalent, covering 80 per cent of our workforce. This will be effective 1st September 2025,” the email, accessed by PTI, read.

Restructuring To Shape A ‘Future-Ready’ TCS

The wage hike decision stands in contrast to the company’s ongoing layoff strategy, which TCS has linked to its larger goal of becoming a “future-ready organisation.” The firm has indicated that its restructuring efforts will focus on investments in advanced technology, wider AI adoption, global market expansion, and workforce optimisation.

“TCS is on a journey to become a future-ready organisation. This includes strategic initiatives on multiple fronts, including investing in new-tech areas, entering new markets, deploying AI at scale for our clients and ourselves, deepening our partnerships, creating next-gen infrastructure, and realigning our workforce model,” the company said in an earlier statement.

Layoffs To Impact Senior And Mid-Level Staff

While the pay hikes aim to retain and reward talent at junior levels, TCS had previously stated that approximately 2 per cent of its global headcount, primarily from senior and mid-level roles, will be released over the year. This has sparked concern across the IT industry about the broader impact of automation, AI integration, and changing client demands on traditional job structures.

“Towards this, a number of reskilling and redeployment initiatives have been underway. As part of this journey, we will also be releasing associates from the organisation whose deployment may not be feasible,” TCS had stated.

Muted Growth Reflects Industry-Wide Challenges

TCS, along with other leading Indian IT firms, reported single-digit revenue growth for Q1 FY26. The June quarter was marked by macroeconomic uncertainties, geopolitical tensions, and slowing global demand, all contributing to delays in client decision-making and cautious spending in tech services.